The Ag Economy Decline is Over, But the Recovery is Slow
For the third year in a row, U.S. net farm income will be steady at roughly $60 billion, half of the peak of 2013, says the University of Missouri think tank FAPRI in a forecast for 2018 that also sees continued stress on farm finances in the years ahead. A modest increase in corn, soybean, and wheat prices in 2019 will put income on a gradual year-after-year incline. While austere, FAPRI’s long-term outlook is sunnier than USDA projections of relatively flat farm income for the next decade.
“Longer term, farm income strength probably requires some new demand pull,” says FAPRI Director Pat Westhoff.
The biofuel boom absorbed U.S. crop-producing capacity just as China’s voracious appetite for ag imports has benefitted growers worldwide. Huge stockpiles worldwide, partly the result of a string of bumper harvests, suggest that it will take more than a one-year-long weather scare to strengthen commodity prices.
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ASFMRA Addresses Shortages, Rural Appraising
The argument continues within the appraisal profession as to whether or not there is an appraiser shortage, and how such a shortage should be clearly defined with specific parameters.
The American Society of Farm Managers and Rural Appraisers (ASFMRA) reached out to Valuation Review, after reading a story about appraiser shortages, and offered an in-depth analysis why there is a perceived shortage of qualified appraisers.
“I am not certain there is a current shortage of appraisers. The number of appraisers nationwide has not declined that much in the last 10 years,” ASFMRA President David GaNun told us. “I know the profession has gone through some greying, but ASFMRA has been growing over the past five years. If we cannot attract new blood in the next 10 years, we probably will have a shortage coming. I think a good part of the ‘shortage’ currently being discussed is due to low fees that have been offered for some work with quick turn-around times and no one is willing to work for less than professional wages.
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Consider Prices, Global Strategy When Leasing Tillable Land
The banging of drums beckons a tariff fight between the U.S. and China, and American farmland just might be the battleground. Considering China is among American farmers’ biggest customers, politicians on both sides of the proverbial aisle are promising to shield the Heartland from the potential impact of tariffs. That said, many would be wise to consider their long-term strategies with regards to the leasing of tillable ground, be it on a cash-basis, the traditional shares model, or a flex-model hybrid.
The leasing of ground is as old as the business of farming itself, and there are advantages and disadvantages to either model, most of which hinge on the value of grain or product being produced on the property, number of acres and other expenses involved. Larger operations and the landlords they serve need to consider the impact of pricing and global market strategies in negotiating these arrangements.
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AgriLife Extension Offers New Agricultural Leasing Fact Sheet
AMARILLO – Texas landowners have a new tool when it comes to determining agricultural leasing rates.
Tiffany Dowell Lashmet, Texas A&M AgriLife Extension Service agricultural law specialist in Amarillo, has published the fact sheet “Negotiating a Fair Cash Lease Rate in Texas.” The document is available as a free download at https://bit.ly/2v4svp2.
“One of the most common questions I am asked is how much a person should charge, if they are a landowner, or pay if they are the tenant, for an agricultural lease,” Lashmet said. “To help answer this question, I have put together a fact sheet listing several free resources available to Texas landowners that may help.”
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Syngenta Acquires Another Seed Company, More Could Come
Earlier this year Syngenta reiterated its dedication to expanding its seed footprint—and the company is backing those claims. Friday Syngenta announced it will acquire Abbott & Cobb, a vegetable seeds breeder, producer and marketer.
“Abbott & Cobb is a strategic acquisition for Syngenta Vegetable Seeds and will give us access to high eating quality germplasm and early maturity varieties to complement the Syngenta portfolio,” says Javier Martinez-Cabrera, Syngenta head of vegetables seeds North America.
This purchase will strengthen the company’s position in sweet corn—a crop Syngenta says is core to their business. In addition, Abbott & Cobb serves commercial growers, distributors, retailers, fresh market, fresh-cut and food services industries worldwide.
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U.S. is Top Beef Supplier to South Korea
Due to a surge in sales last year, the U.S. is the No. 1 beef supplier to South Korea for the first time since mad cow disease was discovered in Washington state in 2003. Seoul imported 184,152 tonnes of U.S. beef worth $1.22 billion in 2017, says the U.S. Meat Export Federation (USMEF). “Demand is especially strong in the Korean retail sector, where consumer confidence in the quality and safety of U.S. beef continues to gain momentum.”
Australia was the dominant supplier for 14 years, taking advantage of the opening created by South Korea’s ban on U.S. beef in 2003. While U.S. beef shipments zoomed by 15% in 2017, Australia’s slipped by 4%, hurt by drought and by tariff rates that now favor U.S. beef. Because of the U.S.-Korea Free Trade Agreement, there is a 21.3% tariff on U.S. beef this year; it’s scheduled to decline to zero in 2026. Australian beef faces a 26.6% tariff this year, dropping to zero in 2028. The tariff on U.S. beef was 40% before the FTA took effect.
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NAFTA Talks Resume Tuesday
Senior trade officials from the U.S., Canada and Mexico will meet again in Washington in an intensified push to reach a NAFTA agreement in the next few weeks.
Talks will pick up on Tuesday, after cabinet-level members vowed on Friday to keep up the momentum following consultations with their technical teams over the weekend. Mexican Economy Minister Ildefonso Guajardo said last week that after seven rounds of talks in as many months, rotating between the three countries, the three sides have entered a concentrated phase where “my negotiating team is practically living in Washington.”
Mexico scored a separate commercial victory over the weekend with a deal in principle to update a 17-year-old free-trade agreement with the European Union. Guajardo jetted to Brussels to help close the deal.
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Post-Irma Agriculture Relief Could Come Soon
Florida farmers awaiting federal disaster relief to help cover losses from Hurricane Irma last September may learn more details this week about the highly anticipated program.
The $2.36 billion Wildfires and Hurricanes Indemnity Program (WHIP) is expected to offer a direct-payments model that would not hold growers to traditional payment limitations and would establish a state-managed program to handle tree losses.
Gov. Rick Scott, Agriculture Secretary Adam Putnam and members of Florida’s congressional delegation have lobbied U.S. Agriculture Commissioner Sonny Perdue to speed up the release of the money amid increasing frustration from the state’s citrus growers awaiting federal assistance related to the deadly hurricane.
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Wyoming Chapter Attends FFA Event
Members of the Wyoming Chapter were in attendance at the FFA's Wyoming Convention in Cheyenne. They had a great time networking and made some great connections with students and leaders from the University of Wyoming and Sheridan Junior College.
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Iowa Chapter Visits ISU Class
Last Week Dave Nebel, Justin Bahr and Traci Shermerhorn of the Iowa Chapter visited an Econ class at Iowa State University. They presented to about 30 students on the what ASFMRA does, careers in ag and and the benefits of joining a Young Professionals network. [Back to Top]